Dan Boyle (Green Party)

A successful, viable financial banking system needs a number of attributes, chief of which are trust and confidence. It is quite clear that Irish banking, at this time in our country's history, is sadly lacking in both. In dealing with the effects of the failure of trust and confidence, the political system needs to deal in candour and honesty. I must admit I am at a stage where I do not believe either quality exists in sufficient quantity.

To regain the trust, initially of the citizens of this country and ultimately of the international community in identifying Ireland as a country worth investing in, we also need degrees of openness and transparency, which, as a country, we seem to have left long behind. If we address this question by trying to instill those qualities back into our political and business systems and into how we interact with the rest of the world, it will go some way to overcoming the maelstrom we have had to experience in recent months.

We in this House have an opportunity to discuss the heads of any Bill prior to it being introduced and that will help to inform the Bill when it is eventually presented to both Houses of the Oireachtas. The Minister's statement yesterday addressed several of the concerns that exist regarding our banking and finance industries. Chief is a recognition of the degree of the problems that exist among our major banks. The decision today of Bank of Ireland to mark down its loan book is the first sign of honesty which has been long missing in recent months in many of our financial institutions. At last one of our two major banks is identifying the scale of the problems it alone is facing. We as a State and group of taxpayers are investing in this bank.

Legitimate questions exist on whether €7 billion will be sufficient. Sufficient work has gone into identifying this amount of money as being necessary to kick-start and revitalise the financial institutions concerned. I am satisfied that safeguards exist, both in terms of the 8% return the State will gain for investing the money and the incentives for the money to be paid back earlier. Some of this money will be paid back up front by the end of this year. Many speakers were correct to highlight that where the Irish public want to see movement and precision in the Bill, when it is eventually presented to us, is in the Irish banking system.

There must be a realisation by the banks and those who have been managing them that they are now utterly dependent on this State to become viable again. There still remains a degree of arrogance and a lack of proper understanding of the failure of the institutions and the people who have been managing them as a reason for creating this economic crisis. To restore confidence we need to go as far as possible to make sure the people who have brought us to this position are not the people who will help to get us to where we need to get to, and I said as much in this House already.

Some Senators are correct in saying the preliminaries to this agreement and the eventual legislation are an affront. The idea of negotiating with people who have shown themselves to be incompetent in how they run their institutions is something the public find greatly to their distaste. That it continues to be done in a culture where salaries and remunerations are paid which are beyond the fantasies at the height of the Celtic tiger and beyond the realisation of 99% of the people of this country is something the individuals concerned still have to confront.

There is also a failure, which must be accepted, of the systems we had in place to protect the public interests regarding the proper behaviour of our banking system. We have had inadequate and flawed regulation in this country and for confidence to ever be restored we must first ensure such a system can be put in place. I am not sure if that can be done within our own resources or through the experience of Irish people in the financial services sector. One of the reasons we had flawed regulation is the degree of "clubishness" and knowledge about individuals which people have, not only in the banking sector but in the political world and the general business world that permeates our society. Unless we are prepared to break those links it will be very difficult to bring in the systems of regulation we need.

I would go so far as to say we need to buy in that expertise. We need people from outside this country to come in, show us the remaining flaws that exist in our banking system and expose them quickly so they can be dealt with quickly. We can then move on as a country. If we are prepared to engage in what happens far too often in this country, which is a high degree of self-regulation, there will be many motes in people's eyes which will remain unmoved because no one wants to talk about the consequences of doing otherwise. It is the domino effect and one person's reputation leads to the fall of another's reputation.

Until we are prepared to confront those contradictions, the minutiae of the legislation is one area we should be least concerned about. We will have a Bill quickly. I am happy the Minister's statement mentioned the areas of agreement needed and that the money, as and when it is invested, needs to go into small and medium enterprises and into certain areas of lending. People have concentrated on the mortgage market. I think the new financial products will bring viability to financial institutions.

The first thing we need to do is invest a new reality into our banks, which means new people, cultures and ways of acting. If today's debate helps to inform the Bill to help it happen, the €7 billion to be invested will, ultimately, benefit the people of this country. If we continue to go down dark alleys and ask questions of each other rather than of the financial system itself, I fear we will be running around in circles and the problems that exist in our financial system will remain untouched.